S&P snips Vialto

S&P said it downgraded its ratings for CD&R Vialto UK Intermediate 3 Ltd., including the issuer rating to CCC+ from B-.

“Vialto's performance since its carveout from PwC has lagged our expectations, and we now believe its capital structure is currently unsustainable. Despite its strong value proposition, new client wins, and sustained good customer retention, Vialto's revenue, earnings, and cash generation fell short of our expectations in the first quarter of fiscal 2024 (ended Sept. 30, 2023). The company reported management-adjusted EBITDA margin contraction of about 450 basis points (bps) and EBITDA decline of nearly 40% relative to the prior year's first quarter,” S&P said in a press release.

The agency said it expects Vialto to generate negative free cash flow over the next 12-24 months and noted the company’s standing in the credit markets has eroded based on recent debt trading prices.

The outlook is negative.

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